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An $84 million project that would have brought condominiums and retail shops to a site on East Washington Avenue currently occupied by a car dealership has been denied the city funding that developer Gary Gorman said was essential.

The project last year had the enthusiastic backing from the City Council as well as support from its neighborhood and the mayor, but it's now halted in its tracks.

In closed session Monday night, the city's Board of Estimates declined a request for $4.2 million in tax incremental financing. Mayoral spokesman George Twigg said that the board's decision was unanimous.

"There was broad consensus that this was not a good deal for the city," Twigg said.

But some of the main supporters of the project said the decision was not that simple. Ald. Brenda Konkel, who was in closed session with the Board of Estimates, said that calling the vote unanimous was "spin."

She saw the collection of buildings proposed for the 800 block of East Washington Avenue as a crucial step in improving the area. Now, she said, there is no hope that the project will be built.

"It's done," she said. "It's as dead as it can be."

She said the city should have found a way to keep the project moving forward.

Gorman, in an interview today, said that the project was impossible without the money he requested from the city, but did not completely write off the development as dead.

"I think it is," he said, but added that "you can never say never."

In an interview last week as negotiations were still unsettled, Mayor Dave Cieslewicz said that he was optimistic about the project, and hoped it could be built. But he acknowledged that the city staff determining the TIF request were in an unusual position, due to the car lot that needed to be moved, and that they were trying to get the best deal for the city.

Gorman was asking for $4.2 million in public assistance for the project through tax incremental financing, which would cover two phases of the development. But the city assistance was needed up front, Gorman said, because he needed to pay to relocate the Don Miller car dealership all at once, even though part of the vacated property would not be developed until a second phase.

Gorman said that by the time the first phase was completed, the city would have been repaid the $4.2 million. He said that the city was concerned that he could sell the land for second phase for "a windfall," and that they wanted guarantees on the money that went toward the second part of the project.

The city's offer included $2.2 million in TIF; Gorman was asking for an additional $2 million. The terms under which money might be loaned to him caused the deal to fall through.

Twigg said that now "it's up to the Gormans if they want to advance any kind of alternative proposal."

Twigg said that he was unsure what would happen with the site, but that the city continues to be actively developed and that East Washington is a marquee corridor for entering Madison.

Gorman said that "a lot of people spent a lot of time on this," and was disappointed by the outcome.